JOB EVALUATION
AND
MERIT RATING
Job evaluation
• Job evaluation is a process to determine in a
systematic manner and analytically the worth of
each job in the organization based upon the set
of carefully selected factors such as skill, effort
and responsibility demanded by the job and
translating these worth of jobs into monetary
terms (e.g., pay and wages).
• It is a job rating method and not the job ranking
method.
• Job evaluation aims to provide a means of
establishing a wage structure acceptable to both
workers and management.
OBJECTIVES OF JOB EVALUATION
• To establish a sound wage and salary system by
determining the worth of each job in the factory in
relation to various factors like skill required, effort and
responsibility involved.
• To eliminate the wage inequalities.
• To clearly define the line of authority and responsibility.
• To formulate an appropriate and uniform wage
structure.
• To provide a sound base for recruitment, selection,
promotion and transfer of employees.
• To identify the training needs of the employees so as to
prepare them for future positions.
• To promote a good employee-employer relations
PROCEDURE FOR JOB
EVALUATION(STEPS INVOLVED)
1. JOB ANALYSIS-Determine detailed facts about the jobs.
2. JOB DESCRIPTION-Describe clearly the requirement of jobs
3. JOB SPECIFICATION-Specify the attributes possessed by
employee to complete the job satisfactorily
4. JOB CLASSIFICATION-Determine the relative worth of jobs
5. WAGE DETERMINATION-Compare jobs with predetermined
job and arrive at suitable wage structure
6. EVALUATE PERFORMANCE- Based on job description and
specification
JOB ANALYSIS
• Job analysis is the process of determining the
facts relating to the jobs.
• It involves a systematic examination of the job.
To find out:
Nature of tasks performed by the workers.
Purpose or objectives of the tasks.
Working conditions under which the tasks are
carried out.
Responsibility, skill required to perform the task.
Relationship between various jobs done in the
department/organization
STAGES IN JOB ANALYSIS
• Stage I. Job identification.
• Stage II. Job information collection.
• Stage III. Qualification requirements.
JOB DESCRIPTION
• Job description follows the job analysis. It gives all
essential facts about the job like duties,
responsibilities, working conditions and other
required facts:
• Job description is composed of three parts:
1. Job identification containing the details like job
title, department, section, job code, names of
supervisor and other details to identify the job.
2. Job summary gives the overall picture of the
duties performed.
3. Work performed gives the details of both regular
as well as occasional tasks performed machines
and tools used, working conditions and hazards.
JOB SPECIFICATIONS
Job specifications are prepared from the data
collected during job analysis.
It is the statement of qualities and capabilities that an
employee must possess to perform the job
satisfactorily.
Job specification describe the extent to which each of
the job factor such as education experience, physical
effort, responsibility for others work, materials
machines and equipment, etc., present in the job and
the degree of difficulty present.
The job descriptions and job specifications both form
the basic for job evaluation and so it is essential to
make it sure that the facts are presented correctly.
METHODS OF JOB EVALUATION
• There are four accepted systems of job
evaluation:
1. Ranking method.
2. Job classification system.
3. Factor comparison method.
4. Point rating system.
Ranking method
• This is the simplest, the most inexpensive
and the most expedient method of
evaluation. Each job is considered as a
whole and is then given a ranking in relation
to all other jobs. A ranking table is then
drawn up and the ranked jobs grouped into
grades.
Job title grade Salary
Engineer 9 25000
Accountant 8 20000
Purchase assistat 7 18000
Machine Operator 6 15000
Office boy 5 10000
• The main disadvantage of this method is
that it lacks substantiating data for later
use in justifying the relative position given
certain jobs. So this method is not suitable
for large organization
Classification method
• Classification systems define the value of
jobs, people, or teams with written
standards for a hierarchy of classification
level. It involves only matching a specific
job with a list of tasks in a predetermined
labor grade. Each grade has asset money
rate.
PROCESS:
[Link] descriptions for a category of jobs—job
classes/grade
[Link] standards for each category by describing the key
characteristics of those jobs in the category.
[Link] jobs to the categoriesbased on the similarity of
tasks.
RESULTS:
Job classes are classified like managerial , office clerical and then
jobs are assigned to these classifications.
ADVANTAGES
I. Jobs, people, and teams can be quickly
slotted into the structure.
II. Classification levels have face validity for
employees.
III. Standards to establish value are made
specific.
Disadvantages
Many jobs, people, or teams do not fit neatly
into a classification level
Extensive judgment is required
Differences between classification levels may
not be equal
Creates status hierarchies within organizations
Extensive administration required
Point method
• The system starts with the selection of job
factors, construction of degrees for each
factor, and assignment of points to each
degree. Different factors are selected for
different jobs, with accompanying
differences in degrees and points. The
most popular number of factors is
between ten and fifteen .
• Skill
1. Education
2. Experience
3. Initiative & ingenuity
• Effort
Physical demand
Mental and / or visual demand
• Responsibility
Responsibility for equipment or process
Responsibility for materials or product
Responsibility for safety of others
• Job Conditions
Working conditions
Hazards
Factors 1st 2nd 3rd 4th 5th Degree
Degree Degree Degree Degree
SKILL
• Education 15 30 45 60 75
• Experience 20 40 60 80 100
• Initiative and Ingenuity 15 30 45 60 75
EFFORT
• Physical demand 10 20 30 40 50
• Mental or visual demand 5 10 15 20 25
RESPONSIBILITY
• Equipment or process 5 10 15 20 25
• Material or product 5 10 15 20 25
• Safety of others 5 10 15 20 25
• Work of other job conditions 5 10 15 20 25
JOB CONDITIONS
• Working conditions 10 20 30 40 50
• Unavoidable hazards 5 10 15 20 25
The Factor Comparison Method
This method is based on the assumption that all jobs
contain certain common factors to determine the worth of jobs.
These factors may differ in the degree to which they are present
in different jobs. Typically the number of compensable factors is
small (4 or 5).
PROCESS:
1. Select the set of Benchmark Jobs
2. Rank the Benchmark jobs on the basis of each
compensable factor.
3. For each Benchmark job, allocate market pay
across the compensable factor
4. Determine the pay for each job by adding up the pay
from each compensable factor.
RESULTS: Pay Range= Pay from skill + Pay from effort + Pay
from responsibility + Pay from working conditions
• Advantages:
• Analytical and objective
• Reliable and valid as each job is compared with
other job
• Disadvantages
• It is difficult to understand and explain
• Using the same criteria to access all job is not
accurate as jobs
• differ within organization as with point method.
• Time consuming and costly